Canonical Definitions

Single source of truth for all terms used in the GASP Standard.

When a term appears in multiple departmental metrics, this is the authoritative definition. Departmental files reference this document; they do not redefine.

Revenue Terms

MRR (Monthly Recurring Revenue)

The total predictable revenue from active subscriptions, normalized to a monthly value.

Canonical definition: Core Metrics
Used in: Core, Finance, Customer Success

ARR (Annual Recurring Revenue)

MRR × 12. The annualized value of recurring revenue.

Canonical definition: Core Metrics
Used in: Core, Finance, Sales, Customer Success, People

New MRR

MRR added from newly acquired customers in the period.

Canonical definition: Core Metrics
Used in: Core, Sales

Expansion MRR

Additional MRR from existing customers (upgrades, add-ons, seat increases).

Canonical definition: Core Metrics
Used in: Core, Customer Success

Churned MRR

MRR lost from customers who cancelled.

Canonical definition: Core Metrics
Used in: Core, Customer Success

Contraction MRR

MRR reduction from existing customers who downgraded (but didn’t churn).

Canonical definition: Core Metrics
Used in: Core, Customer Success

Net New MRR

The net change in MRR after all movements.

Formula: New MRR + Expansion MRR - Churned MRR - Contraction MRR
Canonical definition: Core Metrics
Used in: Core

Revenue (GAAP)

Recognized revenue according to ASC 606 accounting standards.

Canonical definition: Finance Metrics
Used in: Finance, RevOps

Bookings

Total contract value signed in a period.

Canonical definition: Finance Metrics
Used in: Finance, Sales

ACV (Annual Contract Value)

The annualized value of a contract, normalizing multi-year deals to a single year. When aggregated, represents average deal size on an annual basis.

Canonical definition: Sales Metrics
Used in: Sales, Finance

ARPA (Average Revenue Per Account)

Average monthly recurring revenue per customer account.

Formula: MRR / Active Customers
Canonical definition: Core Metrics
Used in: Core (LTV, CAC Payback), Finance

Retention Terms

NRR (Net Revenue Retention)

Percentage of revenue retained from existing customers over a period, including expansion, contraction, and churn. SMSB provides cohort method (preferred) and formula method. Recommended: trailing 12 months, annualized if using shorter periods.

Canonical definition: Core Metrics
Used in: Core, Customer Success

GRR (Gross Revenue Retention)

Percentage of revenue retained from existing customers, excluding expansion. Cannot exceed 100%. SMSB provides cohort method (preferred) and formula method.

Canonical definition: Core Metrics
Used in: Core, Customer Success

Logo Churn Rate

Percentage of customers lost in a period.

Canonical definition: Core Metrics
Used in: Core, Customer Success

Revenue Churn Rate

Percentage of MRR lost to churn and contraction in a period. Gross (losses only, not netted against expansion).

Formula: (Churned MRR + Contraction MRR) / Beginning MRR × 100
Canonical definition: Core Metrics
Used in: Core

Renewal Rate

Percentage of contracts renewed at term.

Canonical definition: Customer Success Metrics
Used in: Customer Success, RevOps

Efficiency Terms

CAC (Customer Acquisition Cost)

Total cost to acquire a new customer.

Canonical definition: Core Metrics
Used in: Core, Marketing, Finance

Marketing CAC

Marketing-only portion of CAC (excludes sales costs).

Canonical definition: Marketing Metrics
Used in: Marketing

LTV (Customer Lifetime Value)

Total profit expected from a customer over their lifetime. Calculated with gross margin.

Formula: (ARPA × Gross Margin) / Revenue Churn Rate
Canonical definition: Core Metrics
Used in: Core, Finance

LTV:CAC Ratio

Ratio of customer lifetime value to acquisition cost.

Canonical definition: Core Metrics
Used in: Core, Finance

CAC Payback Period

Time required to recover customer acquisition cost.

Canonical definition: Core Metrics
Used in: Core, Finance

Gross Margin

Revenue minus cost of goods sold, as percentage of revenue.

Canonical definition: Core Metrics
Used in: Core, Finance

Rule of 40

Revenue Growth Rate (%) + Profit Margin (%).

Canonical definition: Core Metrics
Used in: Core, Finance

Magic Number

Sales efficiency metric: QoQ ARR growth divided by prior quarter S&M spend.

Canonical definition: Finance Metrics
Used in: Finance

Burn Multiple

Capital efficiency metric: Net burn divided by net new ARR. Popularized by David Sacks.

Canonical definition: Finance Metrics
Used in: Finance

Customer Terms

Customer

An entity (company/account) with a paid subscription.

Not: Trial users, free tier users
Counting: One customer = one billing entity, regardless of users
In formulas: Unless otherwise specified, “Customers” means Active Customers

Active Customer

A customer in good standing at a point in time.

Criteria: Not churned, not suspended, payment current
Used for: MRR counts, ARPA calculations, denominator in retention metrics

User

An individual person using the product within a customer account.

Distinct from: Customer (account level)

Active User

A user who performed a qualifying action in the defined period.

Canonical definition: Product Metrics
Qualifying action: Defined per product; must be intentional engagement

Lead

A contact who has expressed interest (form fill, signup, etc.).

Canonical definition: Marketing Metrics

MQL (Marketing Qualified Lead)

A lead meeting criteria indicating sales-readiness.

Canonical definition: Marketing Metrics

SQL (Sales Qualified Lead)

An MQL accepted by sales as worth pursuing.

Canonical definition: Marketing Metrics

Opportunity

A qualified sales prospect in the pipeline.

Distinct from: Lead, MQL, SQL (earlier funnel stages)

Satisfaction Terms

NPS (Net Promoter Score)

% Promoters (9-10 rating) minus % Detractors (0-6 rating).

Canonical definition: Core Metrics
Used in: Core, Onboarding, Partnerships, Professional Services
Note: Same formula everywhere, but measured for different populations (customers, project completions, partners)

CSAT (Customer Satisfaction Score)

Percentage of positive ratings on satisfaction survey.

Canonical definition: Support Metrics
Used in: Support, Customer Success, Onboarding, Professional Services
Note: Same formula, different contexts (ticket, relationship, project)

CES (Customer Effort Score)

Average rating on ease of experience (typically 1-7 scale).

Canonical definition: Support Metrics
Used in: Support

Health Score

Composite score predicting likelihood of retention or churn.

Canonical definition: Customer Success Metrics
Used in: Customer Success, Product

Time Terms

Period

A defined time interval for measurement. Always specify:

Daily
Weekly
Monthly (calendar month)
Quarterly (calendar quarter)
Annual (trailing 12 months or calendar year - specify which)

Cohort

A group of customers/users defined by a shared characteristic, typically signup date.

Example: “January 2026 cohort” = customers who signed up in January 2026

Trailing / Rolling

A period ending at the current date.

Example: “Trailing 12 months” = past 365 days from today

YoY (Year over Year)

Comparison to same period in prior year.

Example: “Q1 2026 vs Q1 2025”

MoM (Month over Month)

Comparison to prior month.

QoQ (Quarter over Quarter)

Comparison to prior quarter.

Financial Terms

COGS (Cost of Goods Sold)

Direct costs to deliver the product/service.

SaaS COGS includes: Hosting, support team, payment processing, third-party software
SaaS COGS excludes: Sales, marketing, R&D, G&A

Operating Expenses (Opex)

Costs of running the business (excluding COGS).

Categories: S&M, R&D, G&A

EBITDA

Earnings before interest, taxes, depreciation, and amortization.

Formula: Net income + Interest + Taxes + Depreciation + Amortization

Burn Rate

Net cash consumed per month.

Canonical definition: Finance Metrics

Runway

Months until cash runs out at current burn rate.

Canonical definition: Finance Metrics

DSO (Days Sales Outstanding)

Average days to collect payment after invoicing.

Canonical definition: Finance Metrics
Used in: Finance, RevOps (same definition)

Bad Debt Rate

Percentage of revenue written off as uncollectable.

Canonical definition: Finance Metrics
Used in: Finance, RevOps (same definition)

Reliability Terms

Uptime / Availability

Percentage of time service is operational.

Canonical definition: Engineering Metrics

SLA (Service Level Agreement)

Contractual commitment for service levels (uptime, response time, etc.).

Incident

An unplanned interruption or degradation of service.

Severity levels: SEV1 (critical), SEV2 (major), SEV3 (minor)

MTTR (Mean Time to Resolve/Recover)

Average time from incident start to resolution.

Canonical definition: Engineering Metrics
Note: DORA uses “Mean Time to Recovery” - same concept

Error Rate

Percentage of requests resulting in errors.

Canonical definition: Engineering Metrics
Product variant: User-facing error rate (per user action)

Pipeline Terms

Pipeline

Total value of active sales opportunities.

Canonical definition: Sales Metrics

Pipeline Coverage

Ratio of pipeline value to quota.

Canonical definition: Sales Metrics

Win Rate

Percentage of opportunities closed as won.

Canonical definition: Sales Metrics
Used in: Sales, Partnerships (partner win rate)

Sales Cycle

Time from opportunity creation to close.

Canonical definition: Sales Metrics

Engagement Terms

Session

A period of continuous user activity in the product.

Ends: After defined inactivity period (typically 30 minutes)

DAU / WAU / MAU

Daily / Weekly / Monthly Active Users.

Canonical definition: Product Metrics

Stickiness

DAU/MAU ratio - how often users return.

Canonical definition: Product Metrics

Feature Adoption

Percentage of users using a specific feature.

Canonical definition: Product Metrics

Activation

Moment when new user experiences core product value.

Definition: Product-specific, must be explicitly defined
Canonical framework: Product Metrics

Time-Based Metrics

TTFV (Time to First Value)

Time from signup to achieving first meaningful value.

Canonical definition: Onboarding Metrics

FRT (First Response Time)

Time from ticket/request to first human response.

Canonical definition: Support Metrics

Resolution Time

Time from request to final resolution.

Canonical definition: Support Metrics

Lead Time for Changes

Time from code commit to production deployment.

Canonical definition: Engineering Metrics

Percentile Conventions

When reporting distributions:

Median (P50): Middle value, use for “typical” experience
P95: 95th percentile, use for “almost everyone” experience
P99: 99th percentile, use for tail/worst case

Never use averages for latency or time metrics - outliers skew results.

Counting Conventions

Point-in-Time vs Period

Point-in-time: Value at a specific moment (e.g., “Customers as of Dec 31”)
Period: Activity during an interval (e.g., “Customers acquired in Q4”)

Beginning vs Ending

Beginning of period: Value at start (for retention calculations)
End of period: Value at end (for current state)

Unique vs Total

Unique: Deduplicated count (e.g., unique users)
Total: All occurrences (e.g., total sessions)

Measurement Period Conventions

Standard measurement frequencies by metric type. Always specify the period used.

Revenue Metrics

Metric	Typical Period	Notes
MRR	Monthly	Point-in-time, end of month
ARR	Monthly	MRR × 12, point-in-time
MRR Growth Rate	Monthly	Month-over-month comparison
New/Expansion/Churned/Contraction MRR	Monthly	Activity during the month

Retention Metrics

Metric	Typical Period	Notes
NRR	Annual (trailing 12 months)	Monthly for operational tracking; annualize if using shorter periods
GRR	Annual (trailing 12 months)	Same as NRR
Logo Churn Rate	Monthly or Annual	Always specify which; monthly × 12 ≠ annual
Revenue Churn Rate	Monthly	Annualize for comparison: (1 - monthly rate)^12

Efficiency Metrics

Metric	Typical Period	Notes
CAC	Quarterly	Lag 1-2 months for long sales cycles
LTV	N/A	Lifetime calculation, not periodic
CAC Payback	Quarterly	Result in months
Gross Margin	Monthly or Quarterly	Aligns with financial reporting
Rule of 40	Annual	YoY growth + trailing margin

Engagement Metrics

Metric	Typical Period	Notes
DAU/WAU/MAU	Daily/Weekly/Monthly	Rolling windows
NPS	Quarterly or Annual	Avoid survey fatigue

Null Handling

When data is missing:

Exclude from calculations: Don’t impute or assume
Report coverage: What percentage of records have data
Flag uncertainty: If sample size is too small, note it

Benchmark Sources

When benchmarks are cited in this standard, they are drawn from:

SaaS Metrics Standards Board (SMSB) - canonical definitions for core metrics
KeyBanc Capital Markets SaaS Survey - annual survey of private SaaS companies
SaaS Capital - retention and growth benchmarks
OpenView/High Alpha SaaS Benchmarks - comprehensive annual report
Benchmarkit - CAC, payback, efficiency metrics
Bessemer Cloud Index
ICONIQ Growth SaaS Research
McKinsey - Rule of 40 analysis
DORA State of DevOps Report (for engineering metrics)
Gainsight (customer success metrics)
Mixpanel (product metrics)

Benchmarks are general guidance. Your targets may differ based on business model, market, and stage.